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Download 7 Donchev.Pdf Articles Energy dependency and competitiveness Energy Dependency and Competitiveness Nikolay Donchev* positions. In most cases, it is asserted the understanding, that it (the competitiveness) Summary: can be studied only at microeconomic The main emphasis in the development system level. Whether it is possible that the of the EU economy over the past decade is competitiveness can be explored at higher placed on two challenges - globalization and levels as well - national economic system the ageing population. The common basis for or the EU economy for example, depends an adequate response to these challenges primarily on the meaning and content that is the competitiveness of the European is put in the term competitiveness. economy. On the one hand, the energy as At the very beginning of his book a polyvalent resource plays an important role The Competitive Advantage of Nations in the improvement of the competitiveness Michael Porter poses the question what of each economic system. On the other is understood under competitiveness of a hand, the provision of the economies with national economy. He demonstrates that it energy resources, i.e. their dependence is not correct to link the competitiveness on imported energy resources, is different. of a national economy to interest rates, The possibilities of an economic system to tax rates, budget deficits, debt, positive increase its competitiveness while reducing or negative trade balance, exchange rate, its dependence on imported energy resources wealth of natural resources. According is determined by the ability to increase the to Michael Porter (2004), the major efficiency with which energy resources determinant of competitiveness is the are used. Energy efficiency is becoming a effectiveness, with which an economic bridge between the competitiveness of an system uses its resources in connection economic system and its dependence on with achieving a single unit of ultimate goal. imported energy resources. Therefore, the main criterion for evaluating the competitiveness of an economic system Key words: Input Output, Economic in qualitative terms appears to be efficiency. Planning, Energy Efficiency, Energy The role and the significance of energy Dependence, National Competitiveness. resources for the increase of quality of JEL Classification: E160, O200, Q40 life are notorious. Without energy the 1. Introduction implementation of whatever human or economic activity is impossible. The he competitiveness topic is polyvalent nature of the energy resource Tsufficiently broad in scope, which determines its essential place with regard suggests its research from different to boosting the competitiveness of an * Ph.D, Assistant, Marketing and Strategic Planning Department, University of National and World Economy, [email protected] 78 Economic Alternatives, Issue 4, 2014 Articles economic system. It is well known that an distributed and consumed. An economic industry, national economy or integrated system can consume bigger quantity of community will be more competitive when energy compared to the generated amount they have less energy costs (ceteris paribus) of energy, i.e. according to the first criterion per production unit (gross or final) or when for energy dependence. However, if the with the same quantity of resources they efficiency by which each energy unit is used produce bigger volume of production (gross is higher than the efficiency with which each or final) from a period to period. Therefore, energy unit is produced, then that economic changes in energy1 output ratio can be system will not be as dependent on energy presented as an indicator of a change in as some other economic system in which the the competitiveness of the given economic total production of energy exceeds the total system and as one of the most important consumption of energy, but the efficiency, factors for its improvement. the creation, transmission, and consumption Yet the separate countries (or integrated of each unit of energy is very low. community) have different available energy The efficiency becomes a bridge resources, i.e. they differ in terms of their between an economy’s dependence dependence on imported energy resources. on imported energy resources and its The energy dependence of a given country competitiveness. The increase in energy or integrated community is most commonly efficiency (ceteris paribus) will lead to an determined by comparing the overall quantity increase in the national competitiveness of energy produced (production plus import) but will also decrease the dependence on with the overall quantity of consumed energy imports and vice-verse – low energy energy (consumption and export). The efficiency will increase the dependence of same applies to the separate energy competitiveness on the import of energy sources (petroleum products, solid fuels, resources. Even if energy supplies are natural gas). If the quantity of the consumed guaranteed, the low efficiency of energy energy (total and/or per individual sources) resources consumption appears to be a is greater than the quantity of the produced restrictive factor for enhancing the national energy (total and/or individual resources), competitiveness. then the respective country or community In this sense, energy dependence are regarded as energy dependent. appears to be a relative category that is This definition of energy dependence dependent on the efficiency with which the contains one major flaw. The focus is placed on energy resource is produced, transferred, the absolute meaning of energy dependence. distributed and the energy resource is Energy dependence can be viewed as a consumed. Therefore energy resources are relative category as well, if the performance important for enhancing competitiveness variations2 are taken into account, with which not so much with regard to their availability each energy unit is created, transmitted, or provision, but to the effectiveness 1 In the most general sense, under energy consumption, it is understood the consumed energy units for obtaining one unit of useful result. On national economy level, the energy-output ratio most often is calculated as the ratio between the amount of energy cover a given period in the economy and the produced GDP for the same period. In other words, the energy-output ratio indicates how many energy units are consumed for the production of a single GDP unit. 2 In the case under efficiency it is understood the ratio between the expended resources for obtaining single unit useful result 79 Articles Energy dependency and competitiveness of their use. In other words, when an waste in the process of energy resources’ economic system increases the efficiency transformation to fuels and energies, of energy production and consumption, transmission and distribution of energy. it also increases its competitiveness and The changes in the efficiency of the reduces its dependence on imported energy entire chain - production, transmission, resources. Therefore, the import of energy distribution and consumption of energy are resources and the efficiency of energy an important benchmark for the adoption resources consumption are among the of measures in terms of diversification of elements used in most of the international energy supplies and in terms of evaluating methodologies for the evaluation of a the overall effectiveness of the energy national economy’s attractiveness for policy. Quite often due to the lack of foreign investors. systematic and comprehensive studies 2. Importance of "energy dependence a situation is reached when the positive - competitiveness" ratio for effects at one point of the above mentioned management chain of energy efficiency are offset, as in other points the appropriate measures In the last decade a major emphasis are not taken. At what point of time, and at in the EU’s energy policy is placed on the which point of this chain should the efforts security of energy supplies in two directions and resources (mainly financial) be focused – the diversification of routes and the depends primarily on the objectives to diversification of energy sources. Under the achieve, on the status of energy efficiency, first approach efforts are mainly directed on the trends and issues that have emerged towards looking for new suppliers of in the different directions, and on other conventional energy resources (oil, natural factors. gas, coal) while under the second one, the For example, if we take the objective attention is focused on the replacement of which the EU wants to achieve in the field conventional with renewable energy sources of energy efficiency by year 2020, and [European Commission, 2011, 2014]. Under namely - increasing energy efficiency by both approaches the possibilities for energy 20%, the question arises as to which of the supply security are largely contingent on four points of the chain, when, and what the geographical location and on natural resources should be directed in order to and climate factors. achieve this goal with the lowest cost of Therefore, the energy efficiency issue resources. In other words, what variation is getting more significant. Currently, of efficiency must be obtained in each of public attention is focused mainly on the the four elements in the chain (production, achievement of energy savings by the transmission, distribution and consumption) overhaul of buildings, the introduction of high in order to achieve this objective? The more energy standards for the new construction, important issue, however,
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